Aiding an Energy Crisis

Like most of the world’s islands, the U.S. Virgin Islands is nearly 100 percent reliant on imported fossil fuels. On average, homeowners are paying about 47 cents per kilowatt hour for electricity, nearly 30 cents more than in New York, the highest-paying state in the contiguous U.S., and close to 40 cents higher than Washington, which boasts the lowest rates.

In early 2012, the Hovensa oil refinery in USVI’s St. Croix—the only one on the island and one of the largest in the world, employing about 1,200 people—closed, citing reasons of financial loss due to low prices of U.S. natural gas, and a weakened demand for petroleum products prompted by the global economic slowdown. The closure has not only affected energy costs, as the refinery provided No. 6 heavy fuel oil and No. 2 diesel fuel to generate most of the electricity on the island, but also eliminated 2,200 direct and indirect jobs associated with the refinery. This has spurred devastating ripple effects on St. Croix’s and the USVI’s economy, including elimination of about $60 million in annual government revenue.

For the past few years, there’s been a great deal of focus on renewable energy development in the country. Self-sustained, fast-tracked projects are a necessity and strong area of focus, and include wind, solar, biomass and biogas. A project in St. Croix, being developed by Tibbar Energy USVI, is strategically utilizing the island’s year-round warm climate and frequent rainfall to grow a fast-growing, high-yielding energy crop that will be used to produce power via anaerobic digestion.

Exploring Options

Las Vegas-based Tibbar Construction Services owner Tania Tomyn and her brother Mark, an environmental engineer, learned of the U.S. Virgin Island’s high energy cost situation, and how it has escalated to a serious energy crisis. Considering St. Croix a second home, the two decided to investigate the possibility of launching an energy project there, and along with the rest of the company’s team and multiple partners, are in the midst of developing a 7 MW biogas plant.Resulting company Tibbar Energy had an initial goal of evaluating what organic feedstocks were available, and will be taking part in a fats, oils and greases and food waste joint recycling partnership with the Virgin Islands Waste Management Authority, a recycling option the island currently doesn’t have. “Landfill space is limited, and we didn’t overlook this,” Tomyn explains. “However, those streams are small, and don’t make up volume that creates any significant amount of energy.”

The company will continue to explore other organic streams in the Caribbean and on the island, but Giant King Grass—supplied by licensee company Viaspace Inc.— was selected as the feedstock of focus for a number of reasons. Partly because it is native to the tropics, but also because relatives of the grass—napier and elephant grass—have done well in the same climate.

Viaspace CEO Carl Kukkonen says GKG has properties very similar to corn straw or stover in terms of combustion and biogas, biofuel and pellet production. What sets it apart from corn straw are its extremely high yields, which Kukkonen says are “10 times the yield of corn straw per acre per year.

He adds that the company is making GKG pellets every day, but electricity production via direct combustion or biogas is the simplest way to utilize the grass. “We believe that biofuels and biochemicals will be a major opportunity in the future, but there are no real commercial opportunities today,” he says.

The first GKG for the St. Croix projects was planted, initially by hand, at the end of last September. “Then we moved to a mechanized system with transplanters,” says Tomyn, describing the process as similar to transplanting vegetables from a nursery. These initial three GKG nurseries, totaling an estimated 30 acres, are where the plants will be grown to populate the 1,500 acres needed for the project.

Tibbar’s farm team has spent a year in GKG trials, growing in the driest and wettest parts of the island, working with multiple agronomists who have grown some of the largest energy crop plantations in the world, according to Tomyn. “What we have found is that GKG has performed very well with minimal irrigation and likes the tropical climate,” she says.

The GKG will be harvested like any silage crop, and transportation equipment will be similar to corn silage equipment, which will haul feedstock to the plant each day. “We will also have silage in storage in silage packs if it is too wet to harvest,” says Tomyn.

Other partners in the project include Bioenergy Crops of Spain, Austria-based Entec, which will build the plant, technology provider Layne/Entec, and Denmark-based engineer/builder/operator Renew Energy a/s. Tibbar has also strategically partnered with the USVI Department of Agriculture Commissioner Louis Peterson to further develop large ponds and gutters for maximum water runoff harvesting capacity.

Benefits and Milestones

Since St. Croix is an environmentally sensitive ecosystem, it is imperative that a project work within those parameters, Tomyn points out. “St. Croix has other types of renewables like wind and solar, but they don’t provide base load power like our technology. The utility has to keep spinning reserves for those nonbase-load renewables, and our project works with the USVI Water and Power Authority to generate power to the island in the most efficient manner and at the lowest cost.”

St. Croix is similar to a small, rural community, and has the highest energy cost in the U.S., Tomyn emphasizes. “Keeping that in mind, we needed to design a project that created value for the community and made good sense. So how do you add value? By creating jobs and agricultural opportunities, and hopefully an agricultural renaissance.”

Tibbar’s project will create 30-plus permanent jobs for 25 years, and additional temporary jobs during the construction phase. The company will invest $70 million into the island within the next two years and expects it to have a very positive effect on tourism, as the focus currently is on showing the “sustainable side” of the island, Tomyn says.

The most recent milestone the project achieved was the securing of a power purchase agreement (PPA) with WAPA, at the end of June. WAPA approved an interconnection agreement—the result of a study performed to determine how energy produced from Tibbar will be integrated into the grid—and signed a 25-year PPA with an option for an additional five years at the end of the contract. Per the agreement, WAPA will pay 24.5 cents per kilowatt-hour to Tibbar for the first five years, 24 cents for years 6 to 20, and 23 cents for the remainder of the contract.

“We are now working hard on design and farm planning and final agreements,” Tomyn adds. “We expect to have permitting done by late fall, then Layne/Entec starts to build the plant. We will be producing power per our June 2015 PPA schedule.”